Morning Briefing - November 14, 2017
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November 14, 2017

AECOM Says Savannah River Contract Loss Isn’t a Done Deal

By ExchangeMonitor

AECOM management said Monday the engineering company remains a major player in cleaning up the U.S. Department of Energy’s nuclear complex and believes it has a real chance of overturning its recent loss of the $4.7 billion contract for liquid waste management at the Savannah River Site in South Carolina.

“We still consider the Savannah River competition to be open and not closed,” Chief Operating Officer Randall Wotring said during AECOM’s fourth-quarter earnings call with financial analysts.

The Energy Department on Oct. 12 awarded the 10-year contract to Savannah River EcoManagement, a venture led by BWX Technologies. The losing teams, one led by AECOM and the other by Fluor, filed contract protests with the Government Accountability Office on Oct. 31.

AECOM executives said the company does not bring protests lightly.

“We are extremely disappointed by that initial decision,” Wotring said. “We are continuing to win [major contracts] above the industry average,” he added.

AECOM reported about $4.9 billion in revenue for the quarter ended Sept. 30, which marked the end of the company’s 2017 fiscal year. That was up from $4.32 billion in the same period a year ago. Revenue for the past 12 months landed at $18.2 billion, up from $17.41 billion for fiscal 2016, the company said in its earnings release.

AECOM’s management services division, which includes the DOE business, recorded $890 million in revenue during the just-completed quarter, which is relatively flat with the $887 million reported during the same period one year ago.

The company recorded $88 million in net income for the quarter, $0.55 per share. The full-year numbers were $339 million and $2.13.

Nuclear Waste Partnership, a joint venture between AECOM AND BWXT, in September was awarded a three-year extension for continued operation and management of DOE’s Waste Isolation Pilot Plant near Carlsbad, N.M. The extension, which is worth $928 million, keeps the joint venture on the job at WIPP through September 2020.

During the call, AECOM officials said they see great potential in the nuclear plant decommissioning sector in the United States, Canada, Japan, and elsewhere. In December 2016, an AECOM-EnergySolutions team landed the roughly $1 billion general contract business for decommissioning the San Onofre Nuclear Generating Station in California.